Converging Patterns of Global Labour Earnings Inequality from 1995 to 2023

This paper examines the evolution of labour earnings distribution across 25 countries by comparing two reference years, 1995 and 2023. It aims to understand how labour earnings distribution has changed over time within each country and to highlight shifting patterns of inequality. The data are then aggregated to illustrate the broader trajectory of income inequality worldwide over the past decades. Several analytical methods are used to visualize inequality trends, including Pen’s parade, Lorenz curves and Growth Incidence Curves. The analysis reveals contrasting patterns between high-income and low- and middle-income countries: while inequality has generally increased in high-income economies, many low- and middle-income countries have experienced notable reductions. Because high-income countries initially had lower levels of labour income inequality, these divergent trends point to a convergence in inequality levels. As a result, global labour income inequality has declined overall, driven by productivity convergence across countries and falling inequality in middle-income economies.

Between the 1990s and the 2020s, global labour earnings inequality decreased, largely due to declining inequality in low- and middle-income countries and economic convergence between nations. At the same time, inequality within high-income countries increased, highlighting persistent distributional challenges despite the broader global trend.